Landry’s closes Chart House abruptly
Difference of opinion over Joe's Crab Shack apparently was the deal-breaker
April 30, 2004
About 50 employees of the Chart House in Steamboat Springs found themselves abruptly unemployed Friday morning after a team from the corporate ownership group closed the steak and seafood restaurant without notice.
A Texas-based crew was loading boxes of files into a U-Haul truck Friday after calling employees together after the dinner shift at 9:30 p.m. Thursday and giving them the news.
“Our managers got us together and (the Landry’s team) said, ‘Sorry, we’re closing.’ It was about five minutes,” longtime bartender Aimee Prevenslik said. “If they’d given us more notice, we could have made plans.”
Landry’s Restaurants, listed on the New York Stock Exchange and with annual sales of more than $1 billion, purchased the 38-store Chart House chain in August 2002 for $45.5 million and assumed debt.
The decision to close the Steamboat restaurant appears not to be not about its performance, but about the landlord’s unwillingness to allow the restaurant to be converted to a Joe’s Crab Shack.
“It wasn’t a numbers thing; it was a concept issue,” landlord Scott Borden said. “Basically, we came to a mutual agreement that the concept they wanted to try here wasn’t one we were comfortable with. We think, as locals, we have a little bit better pulse on the community.”
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Borden’s family owns first National Land Company, which owns the building at the intersection of Pine Grove and Mount Werner roads that housed the Chart House. Scott Borden’s father, Tim, built it specifically for the Chart House 15 years ago.
When Landry’s CEO Tilman Fertitta announced in April 2003 that the Steamboat Chart House was among the restaurants slated to be remodeled to become a Joe’s Crab Shack, Tim Borden asked his attorney to send a formal letter to the company saying he would exercise his rights under the terms of the lease to block such a move.
Scott Borden said negotiations with Landry’s have been amicable. The two parties agreed on a settlement to terminate the lease, which had several years remaining.
A Landry’s representative on site Friday in Steamboat declined to comment and referred questions to a corporate phone number.
Prevenslik said the fate of the restaurant has been a topic of conversation among employees during the past year, but they knew something was up this month because managers had not been allowed to order food and alcohol for the past two weeks. However, they were being told the restaurant would close temporarily to permit remodeling into an upgraded Chart House. Prevenslik, who has been a bartender at the restaurant for seven years, said the restaurant had enjoyed a good winter in terms of sales.
Robin Swinney, who has been a manager at the Chart House for four years, came to Steamboat from the Chart House in Aspen. She said the Aspen restaurant also closed this week. Landry’s had similar plans to convert the restaurant at the foot of Aspen Mountain into a more casual Joe’s Crab Shack where patrons are offered bibs and mallets to help them with their crab dinners.
“I have nothing super negative to say,” Swinney said. “They gave all the employees severance checks, and they offered them COBRA insurance” to help bridge the gap between health insurance plans.
Prevenslik received a check for $300.
Fertitta gave an indication of Chart House restaurants’ dollar volume in an interview that appeared in the Rocky Mountain News last year.
“There are 39 Chart House units. We’re selling off three this year and converting 10 to Joe’s Crab Shacks, mainly on the West Coast,” Fertitta said. “The remaining 26 average $3.7 million even today. We feel the 26 will be at $4 million-plus easily.”
Tim Borden told Steamboat Today in April 2003 that he had dined at a number of Joe’s Crab Shacks and found them pleasant. He just didn’t feel the concept was right for his building’s location. And he was resistant to the substantial remodeling that would be required to make the conversion.
Scott Borden said Friday he has not had any talks with prospective tenants but is welcoming proposals.
“With Strings in the Mountains opening (across Mount Werner Road) this summer, we want to be sure we put in something that’s attractive, and we want to maintain the integrity of the building,” Borden said.
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